80 FR 72758 - Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule on the BOX Market LLC Options Facility
SECURITIES AND EXCHANGE COMMISSION Federal Register Volume 80, Issue 224 (November 20, 2015)
Federal Register Volume 80, Issue 224 (November 20, 2015)
| Page Range | 72758-72761 | |
| FR Document | 2015-29603 |
[Federal Register Volume 80, Number 224 (Friday, November 20, 2015)] [Notices] [Pages 72758-72761] From the Federal Register Online [www.thefederalregister.org] [FR Doc No: 2015-29603] ----------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION [Release No. 34-76447; File No. SR-BOX-2015-36] Self-Regulatory Organizations; BOX Options Exchange LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend the Fee Schedule on the BOX Market LLC Options Facility November 16, 2015. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the ``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that on November 4, 2015, BOX Options Exchange LLC (the ``Exchange'') filed with the Securities and Exchange Commission (``Commission'') the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Exchange filed the proposed rule change pursuant to Section 19(b)(3)(A)(ii) of the Act,\3\ and Rule 19b-4(f)(2) thereunder,\4\ which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. --------------------------------------------------------------------------- \1\ 15 U.S.C. 78s(b)(1). \2\ 17 CFR 240.19b-4. \3\ 15 U.S.C. 78s(b)(3)(A)(ii). \4\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- I. Self-Regulatory Organization's Statement of the Terms of the Substance of the Proposed Rule Change The Exchange is filing with the Securities and Exchange Commission (``Commission'') a proposed rule change to amend the Fee Schedule to revise the qualification thresholds for all volume based fees and rebates on the BOX Market LLC (``BOX'') options facility. Changes to the fee schedule pursuant to [[Page 72759]] this proposal will be effective upon filing. The text of the proposed rule change is available from the principal office of the Exchange, at the Commission's Public Reference Room and also on the Exchange's Internet Web site at http://boxexchange.com. II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in Sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose The Exchange proposes to amend the Fee Schedule for trading on BOX to revise the qualification thresholds for all volume based fees and rebates in the BOX Fee Schedule. Currently the Exchange tiers certain rebates and fees based on a Participant's average daily volume (``ADV'') as calculated at the end of each month.\5\ The Exchange proposes to revise the qualification thresholds so that tiers will not be based on a fixed number of contracts, but instead be based on a percentage of the Participant's volume relative to the account type's overall total industry equity and ETF option volume,\6\ excluding Flex Options.\7\ --------------------------------------------------------------------------- \5\ For purposes of calculating monthly ADV, BOX counts as a half day any day that the market closes early for a holiday observance. \6\ The OCC provides volume information in two product categories: Equity and ETF volume and index volume, and the information can be filtered to show only Customer, firm, or market maker account type. Equity and ETF Customer volume numbers are available directly from the OCC each morning, or may be transmitted, upon request, free of charge from the Exchange. Equity and ETF Customer volume is a widely followed benchmark of industry volume and is indicative of industry market share. Total Industry equity and ETF option volume is comprised of those equity and ETF option contracts that clear in a respective account type at the OCC (Customer, Market Maker and Firm), including Exchange-Traded Fund Shares, Trust Issued Receipts, Partnership Units, and Index-Linked Securities such as Exchange-Traded Notes, and does not include contracts overlying a security other than an equity or ETF security. Under the proposed rule change, Total Industry equity and ETF option volume will be that which is reported for the month by OCC in the month in which the credits may apply. For example, November 2015 Total Industry Customer equity and ETF option volume will be used in determining what, if any, credit a Customer on BOX may be eligible for based on the Customer electronic equity and ETF option ADV it transacts on the Exchange in November 2015. \7\ Calculations do not include Flex Options, which are not traded on BOX. --------------------------------------------------------------------------- The Exchange believes that the proposed percentages are generally equivalent to the current fixed thresholds at current volume levels, but will have the advantage of fluctuating with industry volume. The Exchange also notes that other option exchanges have similar methodology when determining volume thresholds.\8\ The Exchange does not propose to amend the rebates and fees associated with these tiers, or the market participant categories that the fees and rebates apply to. --------------------------------------------------------------------------- \8\ See NASDAQ OMX PHLX, (``PHLX'') Pricing Schedule Section A [sic], ``Customer Rebate Program''; Miami International Securities Exchange, LLC (``MIAX'') Fee Schedule Section I(a)(iii) ``Priority Customer Rebate Program''; BATS Exchange, Inc. (``BATS'') BATS Options Exchange Fee Schedule ``Quoting Incentive Program (``QIP'') Liquidity Rebates''; Chicago Board Options Exchange, Inc. (``CBOE'') Fee Schedule ``Volume Incentive Program'' (page 4); NASDAQ Stock Market LLC (``NOM'') Chapter XV, Section 2 NASDAQ Options Market-- Fees and Rebates; NYSE Arca, Inc (``Arca'') Options Fees and Charges, ``Customer and Professional Customer Monthly Posting Credit Tiers and Qualifications for Executions in Penny Pilot Issues''(page 4); and NYSE Amex, Inc. (``AMEX'') NYSE AMEX Options Fee Schedule, ``Transaction Fee/Credit--Per Contract.'' --------------------------------------------------------------------------- Tiered Volume Rebates for Non-Auction Transactions The Exchange currently provides Non-Auction transaction rebates to Public Customers and Market Makers who achieve certain volume based thresholds. The per contract rebate is based on the Participant's ADV considering all transactions executed on BOX by the Market Maker or Public Customer, respectively, as calculated at the end of each month. The Exchange proposes to instead calculate percentage thresholds on a monthly basis by totaling the Market Maker or Public Customer's executed volume on BOX, relative to the total national Market Maker or Customer volume in multiply-listed options classes. Market Makers and Public Customers who achieve certain volume based thresholds will continue to receive a per contract rebate on all Non-Auction transactions. The Exchange proposes the following qualification thresholds for Public Customer and Market Maker rebates in Non-Auction Transactions: ------------------------------------------------------------------------ Percentage thresholds of national market maker volume Per contract Tier in multiply-listed options rebate classes (monthly) ------------------------------------------------------------------------ 1.......................... 0.000-0.069.................. $0.00 2.......................... 0.070-0.249.................. ($0.03) 3.......................... 0.250-0.299.................. ($0.05) 4.......................... Above 0.300.................. ($0.10) ------------------------------------------------------------------------ ---------------------------------------------------------------------------------------------------------------- Percentage thresholds Per contract rebate of national customer ------------------------------------------------------------------- Tier volume in multiply- Penny pilot classes Non-penny pilot classes listed options classes ------------------------------------------------------------------- (monthly) Maker Taker Maker Taker ---------------------------------------------------------------------------------------------------------------- 1................... 0.000-0.129........... $0.00 $0.00 $0.00 $0.00 2................... 0.130-0.339........... ($0.15) ($0.15) ($0.40) ($0.40) 3................... 0.340-0.549........... ($0.25) ($0.25) ($0.50) ($0.50) 4................... Above 0.550........... ($0.40) ($0.40) ($0.90) ($0.70) ---------------------------------------------------------------------------------------------------------------- Tiered Fee Schedule for Initiating Participants Fees for auction transactions apply to transactions executed through Price Improvement Period (``PIP'') and the Complex Order Price Improvement Period (``COPIP'') auction mechanisms. The Exchange currently assesses a tiered per contract execution fee for Primary Improvement Orders that is based on each Initiating Participant's monthly ADV in total Primary Improvement Order contract quantity submitted on BOX. The Exchange proposes to instead calculate percentage thresholds on a monthly basis by totaling the Initiating Participant's Primary Improvement [[Page 72760]] Order volume submitted to BOX, relative to the total national Customer volume in multiply-listed options classes. While Primary Improvement Orders are submitted by Market Makers and Broker Dealers, the Exchange believes it is appropriate to calculate the percentage thresholds on national Customer volume as Primary Improvement Orders are only submitted as the matching contra order to the PIP or COPIP on the opposite side of a Customer's PIP or COPIP Order. The Exchange proposes the following qualification thresholds for Initiating Participants: ------------------------------------------------------------------------ Percentage thresholds of Per contract national customer volume in fee (all Tier multiply-listed options account classes (monthly) types) ------------------------------------------------------------------------ 1.......................... 0.000-0.079.................. $0.25 2.......................... 0.080-0.159.................. 0.20 3.......................... 0.160-0.339.................. 0.12 4.......................... 0.340-0.849.................. 0.07 5.......................... Above 0.850.................. 0.03 ------------------------------------------------------------------------ BOX Volume Rebate The Exchange currently provides a per contract rebate to all PIP and COPIP Orders of 100 and under contracts that is based on the Participant's monthly ADV in PIP and COPIP Transactions submitted to the Exchange. The Exchange proposes to instead calculate percentage thresholds on a monthly basis by totaling the Participant's PIP and COPIP volume submitted to BOX, relative to the total national Customer volume in multiply-listed options classes. The Exchange proposes the following qualification thresholds PIP and COPIP Transactions: ------------------------------------------------------------------------ Percentage Per contract rebate (All thresholds of account types) national customer ------------------------------- Tier volume in multiply- listed options PIP COPIP classes (monthly) ------------------------------------------------------------------------ 1................. 0.000 to 0.159...... ($0.00) ($0.00) 2................. 0.160 to 0.339...... ($0.04) ($0.02) 3................. 0.340 to 0.849...... ($0.11) ($0.04) 4................. Above 0.850......... ($0.14) ($0.06) ------------------------------------------------------------------------ The Exchange also proposes to make non-substantive technical chances [sic] to renumber the footnotes within the BOX Fee Schedule. 2. Statutory Basis The Exchange believes that the proposal is consistent with the requirements of Section 6(b) of the Act, in general, and Section 6(b)(4) and 6(b)(5)of the Act,\9\ in particular, in that it provides for the equitable allocation of reasonable dues, fees, and other charges among BOX Participants and other persons using its facilities and does not unfairly discriminate between customers, issuers, brokers or dealers. --------------------------------------------------------------------------- \9\ 15 U.S.C. 78f(b)(4) and (5). --------------------------------------------------------------------------- The Exchange believes that revising the qualification thresholds for all volume based fees and rebates in the BOX Fee Schedule is reasonable, equitable and not unfairly discriminatory. The Exchange notes that it is not proposing to adjust the actual fees or rebates assessed or the market participant categories that the fees and rebates apply to. The Exchange believes that the proposed percentages are reasonable as they are generally equivalent to the fixed volume thresholds currently in place on the Exchange. The tiered fee and rebate structures in place within the BOX Fee Schedule are equitable and not unfairly discriminatory as they are designed to attract order flow to the Exchange, which will benefit all market participants by providing more trading opportunities. The Exchange believes that using a percentage based threshold rather than a fixed threshold is reasonable because it will allow the threshold to account for fluctuating industry volume. Further, the Exchange notes that other options exchanges have adopted similar methodology in determining thresholds for their volume incentive programs.\10\ --------------------------------------------------------------------------- \10\ See supra, note 8. --------------------------------------------------------------------------- Finally, as stated above the Exchange believes it is reasonable to calculate the percentage thresholds for Initiating Participant's on total national Customer volume in multiply-listed options classes. Primary Improvement Orders are only submitted as the matching contra order to the PIP or COPIP on the opposite side of a Customer's PIP or COPIP Order. Because of this, the Exchange believes that calculating the percentage thresholds on total national Firm or Market Maker volume in multiply-listed options classes would not accurately account for fluctuations in industry volume and it is more appropriate to use total national Customer volume. B. Self-Regulatory Organization's Statement on Burden on Competition The Exchange does not believe that the proposed rule change will impose any burden on competition not necessary or appropriate in furtherance of the purposes of the Act. The Exchange is simply proposing to revise the qualification thresholds in its volume based tiers to allow for more fluctuation in industry volume. The Exchange believes that the volume based rebates and fees increase intermarket and intramarket competition by incenting Participants to direct their order flow to the exchange, which benefits all participants by providing more trading opportunities and improves competition on the Exchange. C. Self-Regulatory Organization's Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action The foregoing rule change has become effective pursuant to Section 19(b)(3)(A)(ii) of the Exchange Act \11\ and Rule 19b-4(f)(2) thereunder,\12\ because it establishes or changes a due, or fee. --------------------------------------------------------------------------- \11\ 15 U.S.C. 78s(b)(3)(A)(ii). \12\ 17 CFR 240.19b-4(f)(2). --------------------------------------------------------------------------- At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend the rule change if it appears to the Commission that the action is necessary or appropriate in the public interest, for the protection of investors, or would otherwise further the purposes of the Act. If the Commission takes such action, the Commission shall institute proceedings [[Page 72761]] to determine whether the proposed rule should be approved or disapproved. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: Electronic CommentsUse the Commission's Internet comment form (http://www.sec.gov/rules/sro.shtml); or Send an email to [email protected]. Please include File Number SR-BOX-2015-36 on the subject line. Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090. All submissions should refer to File Number SR-BOX-2015-36. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission's Internet Web site (http://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission's Public Reference Room, 100 F Street NE., Washington, DC 20549 on official business days between the hours of 10:00 a.m. and 3:00 p.m. Copies of such filing also will be available for inspection and copying at the principal office of the Exchange. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR-BOX-2015-36, and should be submitted on or before December 11, 2015. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.\13\ --------------------------------------------------------------------------- \13\ 17 CFR 200.30-3(a)(12). --------------------------------------------------------------------------- Robert W. Errett, Deputy Secretary. [FR Doc. 2015-29603 Filed 11-19-15; 8:45 am] BILLING CODE 8011-01-P
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appropriate in furtherance of the Accordingly, the Commission inspection and copying at the principal
purposes of the Act. designates the proposed rule change to office of the MSRB. All comments
be operative upon filing on November 2, received will be posted without change;
C. Self-Regulatory Organization’s
2015.22 the Commission does not edit personal
Statement on Comments on the At any time within 60 days of the identifying information from
Proposed Rule Change Received From filing of the proposed rule change, the submissions. You should submit only
Members, Participants, or Others Commission summarily may information that you wish to make
Written comments were neither temporarily suspend such rule change if available publicly. All submissions
solicited nor received on the proposed it appears to the Commission that such should refer to File Number SR–MSRB–
rule change. action is necessary or appropriate in the 2015–12 and should be submitted on or
III. Date of Effectiveness of the public interest, for the protection of before December 11, 2015.
Proposed Rule Change and Timing for investors, or otherwise in furtherance of For the Commission, pursuant to delegated
Commission Action the purposes of the Act. authority.23
Pursuant to section 19(b)(3)(A) 17 of IV. Solicitation of Comments Robert W. Errett,
the Act and Rule 19b–4(f)(6) 18 Interested persons are invited to Deputy Secretary.
thereunder, the MSRB has designated submit written data, views, and [FR Doc. 2015–29599 Filed 11–19–15; 8:45 am]
the proposed rule change as one that arguments concerning the foregoing, BILLING CODE 8011–01–P
affects a change that does not: (i) including whether the proposed rule
Significantly affect the protection of change is consistent with the Act.
investors or the public interest; (ii) Comments may be submitted by any of SECURITIES AND EXCHANGE
impose any significant burden on the following methods: COMMISSION
competition; and (iii) become operative [Release No. 34–76447; File No. SR–BOX–
Electronic Comments
for 30 days from the date on which it 2015–36]
was filed, or such shorter time as the • Use the Commission’s Internet
Commission may designate. A proposed comment form (http://www.sec.gov/ Self-Regulatory Organizations; BOX
rule change filed under Rule 19b–4(f)(6) rules/sro.shtml); or Options Exchange LLC; Notice of
normally does not become operative • Send an email to rule-comments@ Filing and Immediate Effectiveness of
until 30 days after the date of filing.19 sec.gov. Please include File Number SR– a Proposed Rule Change To Amend
However, Rule 19b–4(f)(6)(iii) permits MSRB–2015–12 on the subject line. the Fee Schedule on the BOX Market
the Commission to waive the 30 day LLC Options Facility
Paper Comments
operative delay if such action is
• Send paper comments in triplicate November 16, 2015.
consistent with the protection of Pursuant to Section 19(b)(1) of the
to Secretary, Securities and Exchange
investors and the public interest.20 Securities Exchange Act of 1934 (the
The MSRB has requested that the Commission, 100 F Street NE.,
Washington, DC 20549. ‘‘Act’’),1 and Rule 19b–4 thereunder,2
Commission designate the proposed notice is hereby given that on November
rule change operative upon filing on All submissions should refer to File
Number SR–MSRB–2015–12. This file 4, 2015, BOX Options Exchange LLC
November 2, 2015, which is less than 30 (the ‘‘Exchange’’) filed with the
days after the date of filing of the number should be included on the
subject line if email is used. To help the Securities and Exchange Commission
proposed rule change, as specified in (‘‘Commission’’) the proposed rule
Rule 19b–4(f)(6)(iii).21 According to the Commission process and review your
comments more efficiently, please use change as described in Items I, II, and
MSRB, the proposed rule change is III below, which Items have been
necessary for the MSRB to comply with only one method. The Commission will
post all comments on the Commission’s prepared by the Exchange. The
Regulation SCI and the waiver of the 30 Exchange filed the proposed rule change
day operative delay allows the MSRB to Internet Web site (http://www.sec.gov/
rules/sro.shtml). Copies of the pursuant to Section 19(b)(3)(A)(ii) of the
conform its rules prior to the Regulation Act,3 and Rule 19b–4(f)(2) thereunder,4
SCI compliance date of November 3, submission, all subsequent
amendments, all written statements which renders the proposal effective
2015. The Commission believes that upon filing with the Commission. The
waiving the 30-day operative delay is with respect to the proposed rule
change that are filed with the Commission is publishing this notice to
consistent with the protection of solicit comments on the proposed rule
investors and the public interest as it Commission, and all written
communications relating to the change from interested persons.
will allow the MSRB to incorporate
changes required under Regulation SCI, proposed rule change between the I. Self-Regulatory Organization’s
such as requiring participation in Commission and any person, other than Statement of the Terms of the Substance
BC/DR Plans testing, prior to the those that may be withheld from the of the Proposed Rule Change
Regulation SCI compliance date. public in accordance with the
provisions of 5 U.S.C. 552, will be The Exchange is filing with the
available for Web site viewing and Securities and Exchange Commission
17 15 U.S.C. 78s(b)(3)(A).
printing in the Commission’s Public (‘‘Commission’’) a proposed rule change
18 17 CFR 240.19b–4(f)(6).
19 Id. Reference Room, 100 F Street NE., to amend the Fee Schedule to revise the
20 In addition, Rule 19b–4(f)(6)(iii) requires a self- Washington, DC 20549 on official qualification thresholds for all volume
regulatory organization to give the Commission business days between the hours of based fees and rebates on the BOX
written notice of its intent to file a proposed rule Market LLC (‘‘BOX’’) options facility.
tkelley on DSK3SPTVN1PROD with NOTICES
change, along with a brief description and text of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for Changes to the fee schedule pursuant to
such proposed rule change, at least five business
days prior to the date of filing, or such shorter time 23 17
as designated by the Commission. The Commission 22 For purposes only of waiving the 30-day CFR 200.30–3(a)(12).
1 15 U.S.C. 78s(b)(1).
has designated a shorter time for delivery of such operative delay for this proposal, the Commission
2 17 CFR 240.19b–4.
written notice. has considered the proposed rule’s impact on
21 See SR–MSRB–2015–12 (filed with the 3 15 U.S.C. 78s(b)(3)(A)(ii).
efficiency, competition, and capital formation. See
Commission on November 2, 2015). 15 U.S.C. 78c(f). 4 17 CFR 240.19b–4(f)(2).
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this proposal will be effective upon volume based fees and rebates in the thresholds. The per contract rebate is
filing. The text of the proposed rule BOX Fee Schedule. based on the Participant’s ADV
change is available from the principal Currently the Exchange tiers certain considering all transactions executed on
office of the Exchange, at the rebates and fees based on a Participant’s BOX by the Market Maker or Public
Commission’s Public Reference Room average daily volume (‘‘ADV’’) as Customer, respectively, as calculated at
and also on the Exchange’s Internet Web calculated at the end of each month.5 the end of each month.
site at http://boxexchange.com. The Exchange proposes to revise the The Exchange proposes to instead
qualification thresholds so that tiers will
II. Self-Regulatory Organization’s calculate percentage thresholds on a
not be based on a fixed number of
Statement of the Purpose of, and monthly basis by totaling the Market
contracts, but instead be based on a
Statutory Basis for, the Proposed Rule Maker or Public Customer’s executed
percentage of the Participant’s volume
Change volume on BOX, relative to the total
relative to the account type’s overall
national Market Maker or Customer
total industry equity and ETF option
In its filing with the Commission, the volume in multiply-listed options
volume,6 excluding Flex Options.7
Exchange included statements The Exchange believes that the classes. Market Makers and Public
concerning the purpose of and basis for proposed percentages are generally Customers who achieve certain volume
the proposed rule change and discussed equivalent to the current fixed based thresholds will continue to
any comments it received on the thresholds at current volume levels, but receive a per contract rebate on all Non-
proposed rule change. The text of these will have the advantage of fluctuating Auction transactions.
statements may be examined at the with industry volume. The Exchange The Exchange proposes the following
places specified in Item IV below. The also notes that other option exchanges qualification thresholds for Public
Exchange has prepared summaries, set have similar methodology when Customer and Market Maker rebates in
forth in Sections A, B, and C below, of determining volume thresholds.8 The Non-Auction Transactions:
the most significant aspects of such Exchange does not propose to amend
statements. the rebates and fees associated with Percentage
these tiers, or the market participant thresholds of
A. Self-Regulatory Organization’s national market
categories that the fees and rebates Tier maker volume in Per contract
Statement of the Purpose of, and rebate
apply to. multiply-listed
Statutory Basis for, the Proposed Rule options classes
Change Tiered Volume Rebates for Non-Auction (monthly)
Transactions
1. Purpose 1 ............... 0.000–0.069 ..... $0.00
The Exchange currently provides
2 ............... 0.070–0.249 ..... ($0.03)
The Exchange proposes to amend the Non-Auction transaction rebates to
3 ............... 0.250–0.299 ..... ($0.05)
Fee Schedule for trading on BOX to Public Customers and Market Makers 4 ............... Above 0.300 ..... ($0.10)
revise the qualification thresholds for all who achieve certain volume based
Per contract rebate
Percentage thresholds of national customer volume in
Tier multiply-listed options classes Penny pilot classes Non-penny pilot classes
(monthly)
Maker Taker Maker Taker
1 ............... 0.000–0.129 ....................................................................... $0.00 $0.00 $0.00 $0.00
2 ............... 0.130–0.339 ....................................................................... ($0.15) ($0.15) ($0.40) ($0.40)
3 ............... 0.340–0.549 ....................................................................... ($0.25) ($0.25) ($0.50) ($0.50)
4 ............... Above 0.550 ....................................................................... ($0.40) ($0.40) ($0.90) ($0.70)
Tiered Fee Schedule for Initiating Period (‘‘COPIP’’) auction mechanisms. Order contract quantity submitted on
Participants The Exchange currently assesses a tiered BOX.
per contract execution fee for Primary The Exchange proposes to instead
Fees for auction transactions apply to
transactions executed through Price Improvement Orders that is based on calculate percentage thresholds on a
Improvement Period (‘‘PIP’’) and the each Initiating Participant’s monthly monthly basis by totaling the Initiating
Complex Order Price Improvement ADV in total Primary Improvement Participant’s Primary Improvement
5 For purposes of calculating monthly ADV, BOX Trust Issued Receipts, Partnership Units, and Index- Program’’; Miami International Securities Exchange,
counts as a half day any day that the market closes Linked Securities such as Exchange-Traded Notes, LLC (‘‘MIAX’’) Fee Schedule Section I(a)(iii)
early for a holiday observance. and does not include contracts overlying a security ‘‘Priority Customer Rebate Program’’; BATS
6 The OCC provides volume information in two other than an equity or ETF security. Under the Exchange, Inc. (‘‘BATS’’) BATS Options Exchange
product categories: Equity and ETF volume and proposed rule change, Total Industry equity and Fee Schedule ‘‘Quoting Incentive Program (‘‘QIP’’)
index volume, and the information can be filtered ETF option volume will be that which is reported Liquidity Rebates’’; Chicago Board Options
to show only Customer, firm, or market maker for the month by OCC in the month in which the
Exchange, Inc. (‘‘CBOE’’) Fee Schedule ‘‘Volume
account type. Equity and ETF Customer volume credits may apply. For example, November 2015
Total Industry Customer equity and ETF option Incentive Program’’ (page 4); NASDAQ Stock
numbers are available directly from the OCC each
volume will be used in determining what, if any, Market LLC (‘‘NOM’’) Chapter XV, Section 2
morning, or may be transmitted, upon request, free
tkelley on DSK3SPTVN1PROD with NOTICES
credit a Customer on BOX may be eligible for based NASDAQ Options Market—Fees and Rebates; NYSE
of charge from the Exchange. Equity and ETF
Customer volume is a widely followed benchmark on the Customer electronic equity and ETF option Arca, Inc (‘‘Arca’’) Options Fees and Charges,
of industry volume and is indicative of industry ADV it transacts on the Exchange in November ‘‘Customer and Professional Customer Monthly
market share. Total Industry equity and ETF option 2015. Posting Credit Tiers and Qualifications for
volume is comprised of those equity and ETF 7 Calculations do not include Flex Options, which Executions in Penny Pilot Issues’’(page 4); and
option contracts that clear in a respective account are not traded on BOX. NYSE Amex, Inc. (‘‘AMEX’’) NYSE AMEX Options
type at the OCC (Customer, Market Maker and 8 See NASDAQ OMX PHLX, (‘‘PHLX’’) Pricing Fee Schedule, ‘‘Transaction Fee/Credit—Per
Firm), including Exchange-Traded Fund Shares, Schedule Section A [sic], ‘‘Customer Rebate Contract.’’
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Order volume submitted to BOX, Percentage Orders of 100 and under contracts that
relative to the total national Customer thresholds of is based on the Participant’s monthly
volume in multiply-listed options national Per contract ADV in PIP and COPIP Transactions
customer fee
classes. While Primary Improvement Tier volume in (all account submitted to the Exchange. The
Orders are submitted by Market Makers multiply-listed types) Exchange proposes to instead calculate
and Broker Dealers, the Exchange options classes percentage thresholds on a monthly
believes it is appropriate to calculate the (monthly)
basis by totaling the Participant’s PIP
percentage thresholds on national 1 ............... 0.000–0.079 ..... $0.25 and COPIP volume submitted to BOX,
Customer volume as Primary 2 ............... 0.080–0.159 ..... 0.20 relative to the total national Customer
Improvement Orders are only submitted 3 ............... 0.160–0.339 ..... 0.12 volume in multiply-listed options
as the matching contra order to the PIP 4 ............... 0.340–0.849 ..... 0.07 classes.
or COPIP on the opposite side of a 5 ............... Above 0.850 ..... 0.03
Customer’s PIP or COPIP Order. The Exchange proposes the following
BOX Volume Rebate qualification thresholds PIP and COPIP
The Exchange proposes the following Transactions:
qualification thresholds for Initiating The Exchange currently provides a
Participants: per contract rebate to all PIP and COPIP
Per contract rebate
(All account types)
Tier Percentage thresholds of national customer volume in multiply-listed options classes (monthly)
PIP COPIP
1 ............... 0.000 to 0.159 .................................................................................................................................... ($0.00) ($0.00)
2 ............... 0.160 to 0.339 .................................................................................................................................... ($0.04) ($0.02)
3 ............... 0.340 to 0.849 .................................................................................................................................... ($0.11) ($0.04)
4 ............... Above 0.850 ....................................................................................................................................... ($0.14) ($0.06)
The Exchange also proposes to make The Exchange believes that using a Exchange believes that the volume
non-substantive technical chances [sic] percentage based threshold rather than based rebates and fees increase
to renumber the footnotes within the a fixed threshold is reasonable because intermarket and intramarket
BOX Fee Schedule. it will allow the threshold to account for competition by incenting Participants to
fluctuating industry volume. Further, direct their order flow to the exchange,
2. Statutory Basis
the Exchange notes that other options which benefits all participants by
The Exchange believes that the exchanges have adopted similar providing more trading opportunities
proposal is consistent with the methodology in determining thresholds and improves competition on the
requirements of Section 6(b) of the Act, for their volume incentive programs.10 Exchange.
in general, and Section 6(b)(4) and Finally, as stated above the Exchange
6(b)(5)of the Act,9 in particular, in that believes it is reasonable to calculate the C. Self-Regulatory Organization’s
it provides for the equitable allocation percentage thresholds for Initiating Statement on Comments on the
of reasonable dues, fees, and other Participant’s on total national Customer Proposed Rule Change Received From
charges among BOX Participants and volume in multiply-listed options Members, Participants, or Others
other persons using its facilities and classes. Primary Improvement Orders No written comments were either
does not unfairly discriminate between are only submitted as the matching solicited or received.
customers, issuers, brokers or dealers. contra order to the PIP or COPIP on the
The Exchange believes that revising opposite side of a Customer’s PIP or III. Date of Effectiveness of the
the qualification thresholds for all COPIP Order. Because of this, the Proposed Rule Change and Timing for
volume based fees and rebates in the Exchange believes that calculating the Commission Action
BOX Fee Schedule is reasonable, percentage thresholds on total national
equitable and not unfairly The foregoing rule change has become
Firm or Market Maker volume in
discriminatory. The Exchange notes that effective pursuant to Section
multiply-listed options classes would
it is not proposing to adjust the actual 19(b)(3)(A)(ii) of the Exchange Act 11
not accurately account for fluctuations
fees or rebates assessed or the market and Rule 19b–4(f)(2) thereunder,12
in industry volume and it is more
participant categories that the fees and because it establishes or changes a due,
appropriate to use total national
rebates apply to. The Exchange believes or fee.
Customer volume.
that the proposed percentages are At any time within 60 days of the
reasonable as they are generally B. Self-Regulatory Organization’s filing of the proposed rule change, the
equivalent to the fixed volume Statement on Burden on Competition Commission summarily may
thresholds currently in place on the The Exchange does not believe that temporarily suspend the rule change if
Exchange. The tiered fee and rebate the proposed rule change will impose it appears to the Commission that the
structures in place within the BOX Fee any burden on competition not action is necessary or appropriate in the
Schedule are equitable and not unfairly necessary or appropriate in furtherance public interest, for the protection of
tkelley on DSK3SPTVN1PROD with NOTICES
discriminatory as they are designed to of the purposes of the Act. The investors, or would otherwise further
attract order flow to the Exchange, Exchange is simply proposing to revise the purposes of the Act. If the
which will benefit all market the qualification thresholds in its Commission takes such action, the
participants by providing more trading volume based tiers to allow for more Commission shall institute proceedings
opportunities. fluctuation in industry volume. The
11 15 U.S.C. 78s(b)(3)(A)(ii).
9 15 U.S.C. 78f(b)(4) and (5). 10 See supra, note 8. 12 17 CFR 240.19b–4(f)(2).
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![Federal Register / Vol. 80, No. 224 / Friday, November 20, 2015 / Notices 72761
to determine whether the proposed rule For the Commission, by the Division of the most significant aspects of such
should be approved or disapproved. Trading and Markets, pursuant to delegated statements.
authority.13
IV. Solicitation of Comments Robert W. Errett, A. Self-Regulatory Organization’s
Deputy Secretary.
Statement of the Purpose of, and
Interested persons are invited to Statutory Basis for, the Proposed Rule
submit written data, views, and [FR Doc. 2015–29603 Filed 11–19–15; 8:45 am]
Change
arguments concerning the foregoing, BILLING CODE 8011–01–P
including whether the proposed rule 1. Purpose
change is consistent with the Act. The Exchange proposes to amend its
Comments may be submitted by any of SECURITIES AND EXCHANGE Fees Schedule, effective November 2,
the following methods: COMMISSION 2015. Specifically, the Exchange
proposes to increase the Customer
Electronic Comments [Release No. 34–76442; File No. SR–CBOE– Priority Surcharge fee assessed to
2015–101] contracts executed in VIX volatility
• Use the Commission’s Internet
index options (‘‘VIX options’’) and
comment form (http://www.sec.gov/ Self-Regulatory Organizations;
weekly S&P 500 options (‘‘SPXW
rules/sro.shtml); or Chicago Board Options Exchange,
options’’). Currently, the VIX Customer
• Send an email to rule-comments@ Incorporated; Notice of Filing and Priority Surcharge (‘‘VIX Surcharge’’) is
sec.gov. Please include File Number SR– Immediate Effectiveness of a Proposed assessed on all Customer (C) VIX
BOX–2015–36 on the subject line. Rule Change To Amend the Fees contracts executed electronically that
Schedule are Maker and not Market Turner.
Paper Comments
November 16, 2015. Additionally, the VIX Surcharge is only
• Send paper comments in triplicate Pursuant to section 19(b)(1) of the assessed on such contracts that have a
to Secretary, Securities and Exchange Securities Exchange Act of 1934 (the premium of $0.11 or greater. The
Commission, 100 F Street NE., ‘‘Act’’),1 and Rule 19b–4 thereunder,2 Exchange proposes to increase the VIX
Washington, DC 20549–1090. notice is hereby given that on November Surcharge from $0.10 per contract to
2, 2015, Chicago Board Options $0.20 per contract on such contracts that
All submissions should refer to File have a premium of $0.11 or greater. The
Exchange, Incorporated (the ‘‘Exchange’’
Number SR–BOX–2015–36. This file SPXW Customer Priority Surcharge
or ‘‘CBOE’’) filed with the Securities
number should be included on the (‘‘SPXW Surcharge’’) is currently
and Exchange Commission (the
subject line if email is used. To help the assessed on all Customer (C) SPXW
‘‘Commission’’) the proposed rule
Commission process and review your contracts executed electronically.3 The
change as described in Items I, II, and
comments more efficiently, please use Exchange also proposes to increase the
III below, which Items have been
only one method. The Commission will SPXW Surcharge from $0.05 per
prepared by the Exchange. The
post all comments on the Commission’s contract to $0.10 per contract.
Commission is publishing this notice to
Internet Web site (http://www.sec.gov/ solicit comments on the proposed rule The Exchange also proposes to amend
rules/sro.shtml). Copies of the change from interested persons. the Fees Schedule with respect to the
submission, all subsequent Qualified Contingent Cross (‘‘QCC’’)
amendments, all written statements I. Self-Regulatory Organization’s Orders Rate Table. By way of
with respect to the proposed rule Statement of the Terms of the Substance background, the Fees Schedule
change that are filed with the of the Proposed Rule Change currently provides for a ‘‘QCC Rate
Commission, and all written The Exchange proposes to amend its Table’’ which sets forth a transaction fee
communications relating to the Fees Schedule. The text of the proposed and credit for QCC transactions. In
proposed rule change between the rule change is available on the addition, the ‘‘Notes’’ section of the
Commission and any person, other than Exchange’s Web site (http:// QCC Rate Table includes the definition
those that may be withheld from the www.cboe.com/AboutCBOE/ of a QCC transaction. Specifically the
public in accordance with the CBOELegalRegulatoryHome.aspx), at ‘‘Notes’’ section currently provides that
provisions of 5 U.S.C. 552, will be the Exchange’s Office of the Secretary, ‘‘A QCC transaction is comprised of an
available for Web site viewing and and at the Commission’s Public ‘initiating order’ to buy (sell) at least
printing in the Commission’s Public Reference Room. 1,000 contracts, coupled with a contra-
Reference Room, 100 F Street NE., side order to sell (buy) an equal number
Washington, DC 20549 on official II. Self-Regulatory Organization’s of contracts . . .’’ The Exchange notes
business days between the hours of Statement of the Purpose of, and that it recently amended its QCC rules
10:00 a.m. and 3:00 p.m. Copies of such Statutory Basis for, the Proposed Rule to expand the availability of QCC orders
filing also will be available for Change by permitting multiple contra-parties on
inspection and copying at the principal In its filing with the Commission, the a QCC order.4 As such, the definition of
office of the Exchange. All comments Exchange included statements QCC Orders in CBOE Rule 6.53 has been
received will be posted without change; concerning the purpose of and basis for amended. The Exchange proposes to
the Commission does not edit personal the proposed rule change and discussed similarly amend the Fees Schedule to
identifying information from any comments it received on the
3 The SPXW Surcharge is not assessed to
submissions. You should submit only proposed rule change. The text of these
contracts executed by a floor broker using a PAR
tkelley on DSK3SPTVN1PROD with NOTICES
information that you wish to make statements may be examined at the terminal or orders in SPXW options in SPXW
available publicly. All submissions places specified in Item IV below. The electronic book that are executed during opening
should refer to File Number SR–BOX– Exchange has prepared summaries, set rotation on the final settlement day of VIX options
2015–36, and should be submitted on or forth in sections A, B, and C below, of and futures which have the expiration that
contribute to the VIX settlement calculation.
before December 11, 2015. 4 See Securities Exchange Act Release No. 75756
1 15 U.S.C. 78s(b)(1). (August 25, 2015), 80 FR 168 (August 31, 2015)
13 17 CFR 200.30–3(a)(12). 2 17 CFR 240.19b–4. (SR–CBOE–2015–073).
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Document Created: 2015-12-14 13:59:03
Document Modified: 2015-12-14 13:59:03
| Category | Regulatory Information | |
| Collection | Federal Register | |
| sudoc Class | AE 2.7: GS 4.107: AE 2.106: | |
| Publisher | Office of the Federal Register, National Archives and Records Administration | |
| Section | Notices | |
| FR Citation | 80 FR 72758 |
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